The Guanajuato Mining District is a world-class, high-grade, silver-gold, epithermal vein system with low sulfidation and adularia-sericite alteration. It is historically a well-known, studied, and documented mining district.

El Cubo mineralization is typical of the classic high-grade silver-gold, banded epithermal vein deposits with low sulfidation mineralization characterized by adularia-sericite-silica alteration. Silver occurs in dark sulfide-rich bands within the veins with little mineralization but significant alteration minerals in the surrounding wall rocks. Significant silver and gold bearing metallic minerals include argentite or acanthite (Ag 2 S), electrum (native Au/Ag), ruby silver sulfosalt minerals, such as pyrargyrite (Ag 3 SbS 3 ) and polybasite [(Ag/Cu) 6 (Sb,As) 2 S 7 ][Ag 9 CuS 4 ]), naumannite (Ag 2 S), native silver (Ag), native gold (Au), and aguilarite (Ag 4 SeS). Other metallic minerals include pyrite (FeS 2 ), galena (PbS), sphalerite (ZnS), and chalcopyrite (CuFeS 2 ). The silver sulfosalts are commonly found at depth while native silver is generally supergene and found in oxidized areas. As typical of these type systems, galena, sphalerite, and chalcopyrite are found deeper in the vein zones.

The silver rich veins, such as Villalpando, contain quartz, adularia, pyrite, argentite (acanthite), naumannite, and native gold. Gold rich veins, such as San Nicolas, contain quartz, pyrite, minor chalcopyrite and sphalerite, electrum, ........

Mining method(s) proposed in the PEA have been used throughout Mexico and are well understood in the Guanajuato area. Mechanized cut-and-fill stoping using small load-haul-dump (LHD) machines and handheld jackleg drills would be the proposed method for the initial production from the underground operation. Other methods, such as long hole stoping or stull stoping, may be considered in the future; but for this PEA, only mechanized cut-and-fill, with some amount of resuing, would be considered. Resuing, combined with mechanized cut-and-fill, would allow selective mining in specific stopes amenable to specialized stoping techniques.

Proposed development methods for both El Pinguico and El Cubo would be conventional drill-blast muck using jumbos for drilling and LHDs and trucks for haulage. Ground support would be installed, as required.

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